Hotel, garage projects remain stalled this year

MONTPELIER — Construction of a hotel and garage complex in the Capital City is unlikely to begin this year because of outstanding appeals against permits issued, according to officials involved in the projects.

Meanwhile, bills for the projects continue to mount as attorneys on both sides of the appeals continue to wrangle over court schedules to reach agreement.

The appeals concern permits issued by the Development Review Board for an 81-room Hampton Inn & Suites Hotel and an adjoining garage on 2.8 acres behind the Capitol Plaza Hotel off State Street owned by the Bashara family. The Basharas asked the city to partner with them and build the garage. The city agreed but increased the size of the garage from 250 to 348 parking spaces.

The Friends of Montpelier, representing 16 city residents, then filed an appeal of the DRB permits for the hotel and garage, saying that the city did not follow its own zoning regulations during the permitting process. Residents also appealed an Act 250 permit for the project issued May 2.

Both appeals mean that the Environmental Court and the Act 250 District 5 Environmental Commission will have to reconsider the applications for both projects de novo (start over again), as if no permits had been issued.

Attorneys for the project applicants and the appellants had a conference call discussion with the Environmental Court on Monday to discuss a schedule going forward to hear the appeal of the DRB permits.

But according to James Dumont, a Bristol-based attorney representing the appellants, attorneys for the city told the court it wanted to file motions with the court by May 31 and schedule a December hearing.

Dumont said the appellants were amenable to the request to file motions on whether some of the issues raised in the appeal should be limited or addressed. He said the parties agreed to have another conference with the Environmental Court on June 10 to check on the status of the appeal.

But Dumont also noted that the city’s attorneys were only proposing to start the pretrial discovery process in September, which he said would not leave the appellants enough time before a December trial.

“The city proposed a schedule to the judge. The city proposed dates when the trial would occur and when the trial would be over,” Dumont said. “We agreed to those. What we disagreed on is when we start pretrial discovery. We’re trying to get this to move as quickly as possible. ”

Dumont also noted that the Environmental Court judge asked whether the appeals of the DRB and the Act 250 permits could be rolled into one hearing, with separate decisions on each appeal.

“But the city said they didn’t want to do that; they want it on a separate track,” Dumont said.

City Manager Bill Fraser declined to comment on why the city’s attorneys refused to combine the appeals, or why they asked the court to delay a hearing until December.

“I have no comment with regard to the court process as it relates to active litigation,” Fraser said. “The city’s attorneys are proceeding in the best interests of the project.”

Dumont denied the appellants were trying to “run out the clock” with appeals that would delay the projects and add additional costs that could “kill” them, in Fraser’s words.

“It’s been raised before, and we’ve responded before — it’s absolutely untrue,” Dumont said. “This has come up before … and our statement of questions lays out in detail what we think is wrong with the DRB (permit decision).”

Fred Bashara Sr. said he was frustrated by the delays and potential added costs for the hotel project.

“We didn’t expect it’s going to be December before we even get to a hearing. We thought that we were going to be able to put a shovel in the ground last November,” Bashara said on Tuesday. “Wait another year? I don’t like it. I thought we could be able to start a lot earlier. I’ve had permits for one year now. May 7th was one year (since) I had my permits, and we started this process a year and a half ago, and we’re maybe still a year away after you get a permit. I’m getting older, I’m 79, I want to get going on this thing.”

Fraser estimates that city costs, so far, related to the garage project total $472,716.

“We have bills from many vendors who were involved in 1) creation of the TIF (Tax Incremental Financing) district, 2) design and permitting of the garage project, and 3) the appeal,” Fraser said.

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I appreciate the Times Argus starting to conduct more "journalism" around this issue. The more facts that come to light, the more clear it is that the city should not be playing with speculative development and money we don't have. The more Bill Fraser shares, the more it's clear the city was spending money we didn't have, under pressure from a "private developer." The creation of a TIF district was speculative at best, and now the city is complaining about bills from vendors coming due? Designs? Permitting? This was a risky strategy from the beginning. How much money did the private developer front load on the strategy? Is the private developer now helping to offset the legal costs? With an only increasingly speculative path going forward, resignation should be a serious part of this conversation.

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